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You are here:Home»Consumers Get Roasted as Starbucks Increases Price of Coffee Nationwide

Consumers Get Roasted as Starbucks Increases Price of Coffee Nationwide

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Last month, Starbucks increased the prices of some of its most popular hot beverages by a nickel to 20 cents in the United States.

While customers can expect to see a spike on the small and big sizes of their favorite brewed coffees, The Associated Press reports that the Seattle-based company will keep the prices of their most popular beverages like the Grande Brewed Coffee and members of the Frappucino family unchanged in most U.S. outlets. Attributing the spike to various factors like rent, labor, marketing and supply concerns, Starbucks Corp. believes the increased prices will affect fewer than 20 percent of its customers. However, that assessment is based on the current purchasing habits of consumers, which consists of cold drinks given the current summer weather. Lisa Passe, a representative for the company said the hike will not affect food or packaged coffee, and most likely take affect within that percentage once customers buy warmer drinks as the weather cools.

The higher price menu comes after U.S. roaster J.M Smucker Co. announced at the start of July that it would cut prices for most of its Folgers and Dunkin’ Donuts coffee brands in a plan to attract more customers.

Though coffee prices are tumbling, the company says its increase is due to a variety of business reasons. For one, it might be related to Starbucks putting employees first with tuition reimbursement, raising wagesand adding health care benefits. Subsequently, there might be a slight pushback from consumers as they look for more inexpensive options like Dunkin’ Donuts or Keurig machines. Though the figures range regionally, for Starbucks lovers who enjoy a tall brewed coffee every day, the 10-cent spike could translate to an extra $36.50 yearly. It might not seem like a lot at first, but for those looking to earn their stars on their Gold Rewards card, it could put a dent in one’s wallet.

As an occasional coffee drinker and lover of Starbucks myself, the increase isn’t really one to panic about. Over the past few years, Starbucks has been increasing their prices to boost fiscal margins with consumers barely noticing or feeling the pinch. These price increases not only separate the company from its competition, but reinforces the premium image of their brand and products, leaving them with a loyal, higher-income type consumer base that perceives its product as an affordable luxury—with some critics even going so far to call it a “luxury tax.”

Concurrently, as technology creates convenience, many are turning to the company’s latest feature of mobile ordering. This advancement could give the company a competitive edge over others and maximize profits. It simply seems these adjustments the company is making are the sheer result of balancing the cost of doing business.